HICL INFRASTRUCTURE (HICL)– Investment Trusts
| Price: 117.6p +3.9% | NAV: |
| Market Cap: £2.17bn | Yield: 6.5% |
The board of HICL has announced today the proposed £5.3 billion combination with THE RENEWABLES INFRASTRUCTURE GROUP (TRIG) will no longer go ahead due to opposition from major shareholders.
Both boards remained convinced of the strategic rationale, but both now have to find an alternative way to deliver better value to investors.
Our View
Opposition to a deal began almost as soon as the deal was announced, led by CG Asset Management (manager of CAPITAL GEARING TRUST (CGT)), with M&G (MNG) the latest firm to throw its weight behind the campaign saying it saw ‘no strategic nor financial rationale’ for the combination.
According to the AIC (Association of Investment Companies), critics of the deal argued it was motivated by the desire of InfraRed Capital Partners, manager of both investment companies, to retain TRIG’s assets and avoid the fund having to hold a continuation vote next year which it might lose.
Given HICL was notionally the acquirer, issuing new shares to absorb TRIG, its shares dropped sharply last month when the deal was announced, so it’s no surprise to see them trading higher today while TRIG shares drop in their place.
Read the full press release here: https://www.hicl.com/investors/
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